Education grant rules were broken

GAO: Exceptions made to award groups millions

WASHINGTON -- The Education Department bent its rules to award grants worth millions of dollars to handpicked organizations and institutions in 2001 and 2002, congressional investigators have found.

In a review released by a top House Democrat, the Government Accountability Office detailed three cases in which the department made exceptions to benefit certain applicants. In at least two of those cases, the groups getting money had ties to the Bush administration.

The GAO also found four other occasions in which grants went to applicants not recommended by anyone on a three-person panel that reviews proposals, thus violating agency rules.

GAO investigators said they are not recommending any corrective action be taken because there were no ''clear violations" of federal law.

Since 2003, the Education Department has made changes to improve how it awards competitive grants, and the agency has generally followed those rules, the GAO found.

Yet even with those changes, the GAO determined, the department has been lax at times -- such as in failing to document whether applicants had been screened to see how well they manage money.

When the department fails to stick to its own rules, ''the integrity of its competitive grant-award process may be undermined," the GAO warned in its report.

''In the absence of such diligence, actions taken that benefit specific grantees, such as those we found in 2001 and 2002, could happen again," the auditors said.

The GAO is the investigative arm of Congress. The report was requested by Representative George Miller of California, top Democrat on the House Education Committee. Miller said the report shows Bush administration cronies benefited at the expense of school districts.

''The Department of Education, even by 2006, has still failed to take all the steps necessary to prevent recurrence of this type of abuse," Miller said.

In a written response, department official Christopher Doherty assured the GAO the department has taken ''major steps to improve its procedures for awarding competitive grants, and these steps have resulted in increased accountability."

Investigators detailed three cases in which the rules were bent for applicants:

The Arkansas Department of Education got $2.3 million for a project with K12 Inc., an online curriculum company founded by William Bennett, who was education secretary under President George H. W. Bush. Federal officials changed their selection methods and expanded their funding list to include Arkansas, and all the other projects lost some money as a result.

The American Board for Certification of Teacher Excellence got a $5 million grant even though its proposal was not recommended by two of the three specialists on a peer review panel. The board is a project of the conservative Education Leaders Council. One of the council's founders, Eugene Hickok, was undersecretary of education under US Secretary of Education Rodney Paige.

America's Charter School Finance Corp. got an unspecified award despite ranking sixth on a list of four grantees that peer reviewers had recommended. A senior political appointee was ordered to ''re-review" the competitors that had finished fifth and sixth. The grantee list was then expanded to five, and America's Charter was bumped up to fifth to qualify.